The government has projected GDP growth at 8 per cent to 8.5% compared with an estimated 9.2 per cent for the current fiscal year and a 6.6 per cent contraction the previous year. India will allocate an additional £1.95 billion to boost investment in solar equipment manufacturing, finance minister Nirmala Sitharaman said while presenting the union budget in the Lok Sabha on Tuesday. She said. "Production Linked Incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made."
She said the budget will lay the foundation for India's economic growth and expansion for the next 25 years. She said the budget comes at a crucial juncture for the public and policymakers alike. The govt expects to lead the world in economic growth this year in a post-pandemic bounceback, according to Economic Survey 2022.
The Reserve Bank of India will introduce a digital currency in the next financial year using blockchain and other supporting technology. The government has also decided to levy 30% tax, the highest tax band in the country, on income arising out of digital assets. The budget has several new ideas to get the economy going again. At the same time, it doesn’t do much harm by introducing new taxes or stop-gap policies, even though it could have done without higher import duties.
Going slow on the fiscal glide path, the government has projected the fiscal deficit to narrow to 6.4% of GDP in 2022-23 on the back of a multi-year high capital expenditure allocation as share of total outlay and modest growth in revenues.
“This is consistent with broad path of fiscal consolidation at below 4.5% of GDP by 2025-26," said Sitharaman.. “I am conscious of needs to nurture growth through public investment… and become stronger and sustainable," she added.
The fiscal deficit target for FY22 was revised down to 6.9% from 6.8% as government’s revenues exceeded the budget estimates by 16.2% to ₹20.7 trillion, and total expenditure overshot by 8.2%.
Capital expenditure, which is used to create assets like infrastructure and acts as a multiplier, is estimated to expand by 24.3% in FY23, while revenue expenditure, which comprises fixed obligations or ongoing operating expenses, such as salaries and pensions, is budgeted to expand by 0.8%. Capex allocation as a share of total outlay is estimated at 19%, in FY23, an 18-year high. It was 22.8% in 2004-05.
Sitharaman speaks on proposed Digital Rupee and cryptocurrencies: What RBI will issue is a digital currency. Everything that prevails outside of it is assets being created by individuals & we are taxing profits made out of transactions of those assets, at 30%. We are also tracking every trail of money in that (transaction of crypto assets) by imposing 1% TDS at every transaction, Sitharaman said.
Sitharaman gave a one-time window to taxpayers to correct any discrepancy or omissions in their ITRs within two years of filing, subject to payment of taxes. She said this is an "affirmative step in the direction of voluntary tax compliance".
Prime Minister Narendra Modi addressed the nation to hail the budget. "The budget has brought new hopes and opportunities for the common people," he said.
Budget 2022-23 is a 'Garib Kalyan' Budget. It will empower the poor and labourers. This Budget is dedicated to the development of infrastructure, rural and hilly areas, and Northeast. This Budget is in line with Govt's policy of social justice and equality, said BJP chief JP Nadda.
